(Toronto) Gains in telecommunications and energy stocks contributed Monday to the rise of the main Canadian stock index.
The S&P/TSX Composite Index rose 71.66 points to 21,061.88 as U.S. stock markets were closed for Martin Luther King Jr. Day.
It was a quiet day on the Toronto Stock Exchange, which tends to be the case when U.S. markets are closed, said John Zechner, president and senior equity manager at J. Zechner Associates.
But there is much to look forward to for investors in the coming weeks after major U.S. banks kicked off the fourth-quarter earnings season on Friday with mixed reports, Mr. Zechner noted.
Investors will be waiting for forward-looking guidance from companies.
“I mean, 2023 was a pretty good year economically, so the fourth quarter was relatively strong,” he noted. So now (the question) will be: how do we see the future? »
In particular, the biggest names in tech reporting results in a few weeks will set the stage for the broader market, Mr. Zechner said.
Investors will also be watching for any economic data reports that could help shed light on when central banks might start cutting interest rates.
The U.S. Federal Reserve recently announced plans to cut its benchmark rate three times in 2024, but investors are betting on a six-fold move, Zechner said.
However, strong calls for cuts to begin in March have been softened in recent weeks, he said, adding that cuts in March “don’t seem feasible.”
“I think the expectation is that it will be by May,” Mr. Zechner said. Everyone believes they will go down this year. It’s just a question of when and, ultimately, how much. »
In Canada, new inflation data will arrive on Tuesday.
Canada’s economy has been hit much harder by monetary policy than that of the United States, due to the structure of the mortgage market here and our exposure to more economically sensitive sectors, Mr. Zechner said.
He noted that other global economies, such as Germany and China, have also slowed more than the United States.
“In a weaker global economy, Canada will face more difficult times. »
Still, Zechner expects the Bank of Canada to largely keep pace with the Fed in rate cuts.
The Canadian dollar was at 74.43 US cents on Monday, down from 74.70 US cents on Friday.
On the New York Mercantile Exchange, crude oil was up 66 cents at US$72.68 per barrel and natural gas gained 22 cents at US$3.31 per million BTU.
Gold was up US$32.40 at US$2,051.60 an ounce and copper was down four cents at US$3.74 a pound.